It's not all bad news

"After 7 Years, Talks on Trade Collapse". Organized labor opines:

"Once again, the Doha round of global trade discussions have collapsed -- a glaring sign that it is time to finally let the World Trade Organization negotiations officially end. It is time to replace the failed WTO model with a new and fair model of trade that benefits the majority of workers in the United States and across the globe.

"All workers have seen what these failed trade policies have done to our jobs, food safety, product safety, wages, the environment and the middle class -- and they have had enough.

"The Teamsters were on the front lines protesting the WTO in Seattle and in Hong Kong. And we're continuing the fight today. It's an outrage that labor rights and the environment are not even a consideration at the WTO."

Testify!

(As always, it's important to keep in mind that about 40% of "international trade" is actually intra-corporate transfers: a corporation manufactures components in one country, ships them to another country where low-wage workers can be exploited to assemble them into a final product, and then ships the product again for final sale—and thanks to the WTO, all without any bothersome tariffs that might make this cycle of exploitation unprofitable.  Here are some figures:

In North America trade associated with U.S. parent multinationals or their foreign affiliates accounted for 54 percent of U.S. exports of goods and 36 percent of imports.[2] Forty percent of trade between the US and Canada in 1998 was intra-corporate.[3]. “Forty percent of the US-Europe trade is between parent firms and their affiliates, and in respect of Japan and Europe, it is 55 per cent; with regard to US-Japan trade, it is 80 %.”[4]

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Comments

[AlexJB]

just a small question of clarification... with the trade going between japan and the US, or the US and europe, who's the "top" and who's the "bottom"? (to borrow some terminology).

i mean, i understand the intra-corporate movement of semi-manufactured goods, but how does that apply between two countries that are on par in terms of cheap labor? or am i mis-guided in terms of the status of cheap labor in japan and europe?

[John Caruso]

I don't think it's always straightforward, but here's an old (but good) example:

But unionized or not, Mercedes-Benz is likely to have much lower labor costs in Alabama than in Germany, because of the weak dollar. ... Mercedes-Benz will be importing many parts -- including engines -- and exporting about two-thirds of the plant's production ...

Importing and exporting, eh? Good thing there aren't any tariffs on that "trade"!

One thing I've been wondering about with this is the extent to which "free trade" has contributed to increased use of long-distance transportation and a resulting increase in emissions of greenhouse gases. Is the WTO basically the anti-Kyoto accord? I've never seen anyone address that, but it seems like a natural result of the increased capital mobility that's at the heart of the WTO.

[Thomas Daulton]

Excellent question, John. I don't think anyone has really studied this in a systematic way. Some scientists already point out that the transport of international commerce, which is of course fossil-fuel intensive, is not properly accounted for in the emission figures which countries use to demonstrate compliance with Kyoto.

The bigger problem is that our entire globalized Capitalistic system of international trade rests on the assumption that shipping pears from Chile to the breadbasket of California incurs only negligible transport costs. (Note that globalization proponents are always up in arms about tariffs, never upset about the costs of transport; that's the above assumption in action.) If, as I believe, the cost of fossil fuel is never ever going to go down (significantly) anymore, and alternative fuels can't provide a quick cheap replacement for trans-global shipping via fossil fuels... (which seems inconceivable right now...) then a lot of countries who have thrown away their self-sufficiency in the name of global trade profits, are going to be royally screwed. Our country, of course, tops that list.

Ted Rall once said, "The purpose of trade remains as it has been since the days of Marco Polo: to trade something you make, for what you don't have. Trade for its own sake is wasteful and counterproductive." But any reporter or academic who studies that proposition will suddenly find themselves without a media platform to announce their results.

One exception: It's easy to find information about the long-distance transportation of FOOD versus its emission of greenhouse gases: that's a hot topic lately. Think globally, eat locally.
http://www.independent.ie/lifestyle/food-drink/food-miles-all-you-need-to-know-689576.html
Only 30% at most of "Whole Foods" produce is local

One might assume that pretty much every consumer product leaves a trail of carbon emissions behind it too.

...but even that is not as straightforward as it seems: often the emissions from transport are dwarfed by the emissions during preparation of the product.
http://www.independent.ie/lifestyle/food-drink/and-you-thought--the-carbon--footprint--debate-was--simple-1333673.html

Seems like no matter how you slice it, we're screwed.

[John Caruso]

The bigger problem is that our entire globalized Capitalistic system of international trade rests on the assumption that shipping pears from Chile to the breadbasket of California incurs only negligible transport costs.

I'd have to assume that corporate accountants have calculated that the transport costs are more than offset by the savings in labor costs...but I'm sure you're right that rising fuel costs are putting a major kink in those calculations.

Seems like no matter how you slice it, we're screwed.

I'd be the last one to argue with that, but here's a little pick-me-up for you.

[Thomas Daulton]

Just for completeness:

Shipping Costs start to crimp globalization: "The cost of shipping a 40-foot container from Shanghai to the United States has risen to $8,000, compared with $3,000 early in the decade..."

Your point that "corporate accountants have calculated that the transport costs are more than offset by the savings in labor costs"... precisely! Yes! That's the whole point of globalization, and the whole assumption which rising fuel prices are now invalidating.

The point of globalization is to race to the bottom in terms of labor costs, by seeking out labor situations that are more exploitive than the U.S. and hence cheaper. (As Dean Baker points out, when the politicos set out to write the WTO and GATT treaties, etc., they didn't ask doctors or teachers how global access could make their jobs easier. Their conversations began and ended with businessmen, asking for ways they could make the shipping abroad, of capitol and productivity, easier.)

As the cost of global shipping rises, it becomes another expense targeted for cutting-back. Which means to a small but growing degree, businessmen suddenly have to deal more seriously with the local people in the area where their commercial goods are made and/or sold. They have to worry about whether their factory is polluting the prized local lake, instead of simply shipping the factory off to China where nobody gives a fig about pollution. They actually need to worry about whether their line workers have health insurance, or else their limited local labor pool will dry up as the workers get sick or maimed... instead having their pick of labor in multiple third-world countries, where an infinite supply of the destitute unemployed simply crawl over the bodies of the sick and injured in order to get another day's subsistence pay.

In short, rising transport costs mean that international business "barons" find it much more difficult to buy labor dirt-cheap in some hellhole country and then sell [the products of] that same labor at a gigantic markup to the affluent in their homeland. Thus throwing a monkeywrench into the basic Capitalistic principle: buy cheap, sell dear. And we all know that Capitalism is not about "adding value" nor "honest day's work for an honest day's pay" or any of that bullcrap. People are only in it to make money, so if they can't "buy cheap sell dear" then the whole system collapses.

And at this point, the fat lady isn't singing, but it looks like she's clearing her throat and doing breathing exercises.